"We have been incredibly creative with limited resources," she said. "We have reduced the budget by a total of 25% and we have done it without collapsing ratings or performance. We are doing really well. Don't write us off."

She added that the broadcaster had been "really ruthless" taking money out of its daytime and late night schedules and renegotiating contracts with suppliers.

However, she said its ratings performance had not suffered, with Five the only terrestrial broadcaster whose family of channels' share was up year on year, by 0.2%.

The new Five controller, Richard Woolfe, was brought in earlier this year to refocus the broadcaster on entertainment and he is expected to announce several big new shows in the autumn, including a new series from Paul Merton.

The Nintendo ad-funded series Britain's Best Brain will also launch soon, as will its new nightly 7pm "news entertainment" show, to be made by Sky News.

Airey also said the broadcaster was still "actively looking" to launch a standalone pre-school digital channel based on its successful Milkshake programming strand on Five.

She said the broadcaster did not want to pay for any more spectrum, with the new service expected to air during the day on either the Fiver or Five USA digital channel slot, along the same lines as the BBC's children's channels CBeebies and CBBC, which share spectrum with BBC3 and BBC4.

"I had a meeting about it this week," Airey said. "The economics of it are quite compelling. It is something we are still actively looking at. I suspect we will make a decision by the end of the year."

Airey also said reiterated her belief there would be major consolidation among the main UK commercial broadcasters over the next 12 months.

"There will be consolidation in the year," she added. "If the economics carry on like they are, it is unsustainable for most commercial broadcasters."

Following the collapse of merger talks between Five and Channel 4, Airey said the broadcaster was now speaking to the BBC's commercial arm, BBC Worldwide – itself currently in discussions with Channel 4 over a tie-up – about some form of partnership. It is thought it could take the form of a joint sales house with the UKTV channels, in which BBC Worldwide holds a 50% share.

"We are talking to BBC Worldwide," she said. "We will not let Channel 4 have a free run with Worldwide on a joint venture."

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